10 conditions to invest in Deep Dyve Organisation - Essay Example

? 10 CONDITIONS TO INVEST IN DEEP DYVE ORGANISATION Table of Contents Table of Contents 2 Introduction 3 Demand Conditions 3 Knowledge Conditions 5 Industry Life Cycle 5 Technological Evolution Patterns 6 Identification and Satisfaction of Real Market Needs 7 Barriers to Entry 8 Understanding Customer Adoption 9 Feasibility Analysis 9 Managing Intellectual Property 10 Industry Structure 11 Conclusion and Recommendations 11 References 13 Introduction DeepDyve, Inc. is a US based company engaged in the business of providing rental services online for scholarly articles obtained from peer reviewed journals which are meant for medical, technical and scientific research purposes. The articles cover wide range of subjects like finance, business, humanities, IT, computer science, life sciences, etc. (Outsell, 2012). The company is headquartered at Sunnyvale, California and was founded in the year 2005. Previously it was named as Infovell, Inc. and was later renamed as DeepDyve, Inc. in the year 2008 (Bloomberg, 2012). Mr. William C. Park is the Chief Executive Officer (CEO) and director of the company (DeepDyve, 2012a). The company has a unique business model and has been operating its business successfully since its inception. This study entails about the detailed analysis of the company based on ten different conditions. Those ten conditions discussed in this study includes, demand conditions, knowledge conditions, industry life cycle, pattern of technological evolution, identification and satisfaction of market needs in real, entry barriers, understanding of customer adoption, feasibility analysis, managing intellectual property rights and the industry structure in which DeepDyve operates its business. Based on the company analysis recommendations have also been suggested for the investors who wishes to invest in the company. Demand Conditions Demand conditions refer to the attributes related to the preferences of customers related to a certain service or product offered by an organisation. There can be different types of dynamics associated with demand conditions in an industry. It can either have an increasing trend or a decreasing trend. It might be stable over a period or fluctuating in nature. Everything depends on the perceptions of customers regarding a service or product offered to them. To be more specific, three of the attributes related to demand conditions prove to be most important for a new or emerging company or industry. They are: a) Market growth, b) Market size, and c) Market segmentation. It has been found by the researchers that larger markets are mostly profitable for newer organisations like DeepDyve. The company has come up with a new business idea and has successfully implemented the idea to transform it into a business which can cater to the demand of the services required by the targeted customers of the company. DeepDyve has established its business with the motive of catering to the needs of information professionals who visit different journal websites in search of information from the articles published on those journals. It has been observed that millions of such professionals visit those journal websites everyday in search of their required information in the journals and the contained articles. However, open access to most of the peer reviewed journals are restricted to only the users who are either affiliated to or associated with certain governmental or educational institution or who can afford to pay for the costs of those journals (DeepDyve, 2012b). Hence, DeepDyve has successfully segmented the market for journal access by information professionals who find it inconvenient to search for their required information in hundreds of publishers' websites and are not affiliated to any of the above mentioned institutions to have an open access to the full text materials inside the journals. DeepDyve has come up with a new solution for such targeted information professionals who can search for their required information at one place in the company's websites and they also have the opportunity to have an access to the paid journals on rental basis at a much lower costs than what is needed to be spent to buy them. This type of commercial website as offered by DeepDyve is first of its kind in the market and the market potential is huge for the unprecedented demand for such service offered by the company through its website. Hence, DeepDyve is observed to have utilised the demand conditions in the industry successfully. Knowledge Conditions Economists are generally found to refer to the term knowledge condition of an organisation that are related to the information and facts which helps in the creation of new products or services in the corresponding industry of the company. Various dimensions or factors related to knowledge conditions of an industry can help a company like DeepDyve to create favourable conditions for its sustainability and growth in future. Three of those dimensions that can be considered to be critical for a company are: a) the intensity of research & development (R&D), b) the locus of innovation, and c) the innovation process itself. In the context of DeepDyve all these three dimensions are found to have been adopted and implemented successfully in its business procedure. Through in-depth R&D the company has successfully developed a new business idea which has proved to be significantly profitable for the company so far. The company is observed to have acquired adequate knowledge of the industry and developed an innovative business idea by offering access to scholarly peer reviewed articles and journals on a rental basis which proves to be a quite easy and acceptable offer for its customers and at affordable rates. Hence, it can be concluded that DeepDyve, Inc. has successfully utilised the knowledge conditions prevalent in the corresponding online research industry. Industry Life Cycle Industry life cycle is an important aspect for the success of a small and new organisation like DeepDyve. It relates to the fact that new companies are found to succeed more in industries which are young rather the industries which are already matured. The process leading to the birth of an industry, its maturation and ultimately to its death is collectively termed as the industry life cycle of the industry (Hill, and Jones, 2009, p. 57). DeepDyve operates its business in the online research industry which is comparatively new and have the opportunity to explore all the relevant resources to strengthen its profitability and sustainability position in the industry. In fact the company has been successful in doing so in a significant way as evident from its growth over the last few years. DeepDyve has started its business in the online business industry and caters to the needs of the information professionals who are in search for information of various peer reviewed articles published by many of the well established publishing firms of the world. With the increasing demand of information sought by the researchers all over the world the corresponding industry can be adjudged as being in its initial stages of the industry life cycle. Hence, DeepDyve can explore all the available opportunities in the industry to make its business profitable and sustainable in the forthcoming years of its business operations. There is a huge potential of growth for DeepDyve in the industry and the company is found to explore all the possible opportunities in the industry to strengthen its business at present. Technological Evolution Patterns In today’s world the greatest challenge for any business concern is to keep up with the rapid advancements of technology taking place worldwide. All the business organisations need to be proactive and ready to implement new advanced technologies in its business procedures to have a competitive advantage in the market. With the increasing use of internet by people, most of the business concerns are trying to catch hold of the online business industry. In the context of DeepDyve, Inc. it has implemented technology in its business procedures in an effective and efficient manner. It offers access to paid journals by most of the eminent publishers of the world through its website on rental basis. People can have access to the full view of the journals by paying low rents without requiring buying the journal. The company uses the latest technology to offer its services through its website. People can access the contents of the journals online but are restricted to copy, download or print the contents of the journals. The read only full text view of the journals is available to the users for a limited period of time depending upon the rental plan chosen by them. Hence DeepDyve have successfully utilised the latest technology in its unique business model which serves as a complementary to the business model owned by the eminent publishers of the world. DeepDyve’s website and the embedded technology is utilised by many of the industries like financial services, bio-pharmaceuticals, consulting, legal, etc (DeepDyve, 2012c). DeepDyve is continuously improving its technology to offer services to the customers in a more effective and efficient way. Identification and Satisfaction of Real Market Needs It is critical for any entrepreneur to identify the actual needs in the market for the products or services to be offered by them to successfully establish its business. DeepDyve has established its business only recently in the year 2005. It has identified the actual needs and requirements of the people who wish to search through the information contained in many of the peer reviewed articles published in different journals for their research needs. The information professionals who are not affiliated to any governmental or educational institution or who cannot afford to pay for the price of the journals find it difficult to fulfil their needs. DeepDyve realised the needs of these unaffiliated users and has come up with a business idea which is best suited for them. The company offers full access to the paid journals to its users at cheap affordable rental costs. Moreover searching for specific information in different journals published by different publishers is all possible at one place through DeepDyve’s website. Hence, DeepDyve has identified the real needs of its targeted customers and has been successful in providing the best solution for them through its website. People can access the paid journals at affordable costs and in a convenient way through DeepDyve’s website. Barriers to Entry Creating barriers for other companies to imitate the business idea developed by a new company is critical towards its success. By providing barriers to the competitors of an organisation, it can help the company to gain a competitive advantage in the market and increase and sustain its profitability for a long time in the future (Hoshi, Balcerowicz, and Balcerowicz, 2003, p. 2). DeepDyve is a new company which operates its business activities utilising a unique business idea developed for the first time in the online research industry. Hence it is important for the company to be able to prevent its competitors to imitate its business idea because that can have an adverse impact on the profitability of the company. It is not always easy for a company to keep the new business idea as a secret for long. Same applies to DeepDyve as well and today everybody is aware of the business model DeepDyve is working upon. However, apart from maintaining secrecy there are other ways to create entry barriers and prevent other companies to imitate the business idea of DeepDyve. One such means is through having a control over the resources required to operate similar business activities like DeepDyve. The company is observed to have utilised this means of creating entry barriers quite successfully because it has already partnered with most of the eminent publishers of the world who publishes articles in many of the peer reviewed journals of the world. Moreover, DeepDyve have also partnered with many business concerns to provide them with its technological solutions required in various types of industries worldwide. All these facts suggest that DeepDyve has been growing and expanding its business at a fast pace and have created control over its business resources to provide a successful entry barrier for its competitors. DeepDyve enjoys a competitive advantage in the market and having an increasing trend in its profitability position over the last few years. Understanding Customer Adoption It has been found that the adoption rate of new products by the customers is almost normally distributed where few people are found to adopt the new product at the very onset; comparatively larger number of people adopts the product at its middle growth stages and again few of them adopt it at later stages. DeepDyve is found to have understood the customer’s perception towards the services offered by them effectively. It has been found that billions of information professionals who are unaffiliated to any kind of institutions visit the websites of scholarly publishers every year. However, only around 0.2% of them are found to opt for purchasing or subscribing to the publisher’s websites (DeepDyve, 2012d). The primary reason behind this is the unaffordable costs of the journals offered by the publishers. DeepDyve have utilized this opportunity to offer open access to paid journals to unaffiliated users at low costs on rental basis and the customers find this business idea very helpful to them. Millions of people are subscribing to the services offered by DeepDyve which is adding to the profitability of the company in a significant way. Feasibility Analysis DeepDyve, Inc. has been established only recently in the year 2005 and it can still be considered to be a start up company which has started operating its business activities only recently. However, the company has been working upon a unique business model which offers rental services to access articles published by many of the peer reviewed journals of the world. This is a unique business idea developed by the company and proves to be a promising one too. However, it requires feasibility analysis of its unique business model to have an idea about whether the business can be sustainable in the long term future or not (Kumar, Poornima, Abraham, and Jayashree, 2008, p. 140). The competitors of DeepDyve are only few in numbers given the unique business model it has developed to serve its customers. The demand for its services is significant because DeepDyve’s website offers the best services to the unaffiliated information professionals to fulfil their demands of accessing the peer reviewed journals at affordable rates and in a convenient way. Economically the market potential for the services offered by DeepDyve is huge and it can increase the company’s profitability in a significant manner in future. The company has already established a competitive advantage in the market and is continuously strengthening its core competencies. All these facts suggest that the business model of DeepDyve is feasible and has a great potential to establish its business in the market on a large scale to boost its profitability and sustainability in future. Managing Intellectual Property Intellectual property relates to the invention of a creative work by someone which is then considered to be the property of the inventor himself. Intellectual property rights of a particular product or service invented by an organization are normally protected by laws. Hence managing the intellectual property owned by a company is vital for its development through protection of its own created ideas (Slope, 2006, p. 4). In the context of DeepDyve, Inc. it has come up with a new business idea which is unique in nature and first of its kind in the industry. The business model is found to work for the company in a significant way as well. Hence managing the intellectual property rights is a great challenge for the company. The best way to do it is to have control over the resources utilised by the company to operate its business activities. The company has been successful in gaining control over its resources by partnering with the eminent publishers of the world to carry on its business. The technology used by DeepDyve is also trusted by its partners and are actively participating in the process of providing DeepDyve with all its resources. Hence, DeepDyve managed to gain control over its resources to prevent other market players to imitate its business model which indicates that it has been successful in managing the intellectual property that it has created. Industry Structure The industry structure in which a company is operating its business activities and analysis of various information related to the corresponding industry is vital for a company like DeepDyve for its growth, development and sustainability in future. DeepDyve operates its business in the online marketing industry and offers access to various scholarly journals and articles online to its customers on a rental basis. This is a new concept and has not been utilised by many of the existing established companies in the industry. This suggests that the competitors of DeepDyve are not that significant in number and do not operate similar business activities in the industry. Two of the major competitors of DeepDyve can be identified in the form of Google and Libertas Academica (Venturebeatprofiles, 2012). Google is considered to be the online search giant and Libertas Academica is engaged in the business of providing access to peer-reviewed journals but is restricted to medical journals only. This suggests that DeepDyve do not have significant threat from its competitors at present and is enjoying a competitive advantage in the industry. The major disadvantage of the established companies in the industry like Google in comparison with DeepDyve is that their services are not a match to the ones provided by DeepDyve. The business model used by DeepDyve is unique and first of its kind which is has created huge demand in the market. DeepDyve has brought a new dimension to the industry and is the leading player in the services offered by them. Conclusion and Recommendations DeepDyve, Inc. runs a commercial website which provides access to numerous peer reviewed journals published by different eminent publishers of the world at one place. People can search through different publisher contents at one place and in a convenient way. Moreover the rental services offered by the company are unique through which people can have open access to paid journals at affordable rates. The analysis of the company as done in this study taking into account different perspectives suggest that its growth in the industry is tremendous. Demand for its services is also high and the company has a huge potential to increase its growth and profitability in future. Based on all these facts and the analysis done in this study it is suggested that DeepDyve is a good option for the investors to invest their funds and generate a significant return out of it. References Bloomberg Businessweek, 2012. Company Overview of DeepDyve, Inc. [online] Available at: [Accessed 19 September 2012]. DeepDyve, 2012a. Management. [online] Available at: [Accessed 20 September 2012]. DeepDyve, 2012b. DeepDyve — Finally, a simple way to get the articles you need. [online] Available at: [Accessed 20 September 2012]. DeepDyve, 2012c. Business Partners. [online] Available at: http://www.deepdyve.com/corp/partners/businesses [Accessed 20 September 2012]. DeepDyve, 2012d. Publisher Partners. [online] Available at: [Accessed 20 September 2012]. Hill, C., and Jones, G., 2009. Strategic Management Theory: An Integrated Approach. 9th ed. Connecticut: Cengage Learning. Hoshi, I., Balcerowicz, E., and Balcerowicz, L., 2003. Barriers to Entry and Growth of New Firms in Early Transition: A Comparative Study of Poland, Hungary, Czech Republic, Albania, and Lithuania. New York: Springer Publishing. Kumar, S. A., Poornima, S. C., Abraham, M. K., and Jayashree, K. 2008. Entrepreneurship Development. New Delhi, New Age International. Outsell, 2012. DeepDyve, Inc. [online] Available at: [Accessed 19 September 2012]. Slope, 2006. Managing Intellectual Property: The Strategic Imperative. New Delhi: PHI Learning Pvt. Ltd. Venturebeatprofiles, 2012. DeepDyve: Competitors. [online] Available at: [Accessed 19 September 2012]. Read More